1 Which of the following describes the Central (or Great) Economic Problem?

a.

Greed can be both good and bad

b.

Resources are scarce relative to the wants they attempt to satisfy

c.

There is not enough money to lift everyone out of poverty

d.

If one person becomes richer, another person has to become poorer

2 Which branch of economics focuses on individual households, firms, and markets?

a.

Positive economics

b.

Normative economics

c.

Microeconomics

d.

Macroeconomics

Because people are purposeful and self-interested, voluntary exchanges:

a.

must be mutually beneficial.

b.

should be viewed with suspicion.

c.

usually benefit one person and harm the other.

d.

are basically random.